General Assembly panels approve State Center project - Orlando Business Journal:

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billion State Center redevelopment in Baltimorew Citymove forward, despite lingering concerns about the project’d finances and impact on Maryland’s ability to borroq money. The Senate Budget and Taxatio Committeevoted unanimously, but with some to endorse the State Center project, whichn involves leasing 25 acres of land to a privat e development team. The House of Delegates’ Appropriationes Committee indicated it will do the same but did not formallu vote as its Senate counterparts didThursday afternoon. The project will now go to the statwe Board of Public Works for a schedulesd June3 vote. The board is led by Gov.
Martin who supports the projec t and worked closely on it whilee he was mayorof Baltimore. Matthew the governor’s deputy chief of staff, lobbied the House and Senatr onthe project. “We are at the cusp of a very importanrt milestone,” Gallagher said. “The governor’s office is very supportive of this projecty and has been involved dating back to our time at the Gallagher told the House during its hearing on the In signing off onthe proposal, the Housee and Senate legislators insisted on having more oversight in the redevelopmenr process.
They also conditioned theirr approval on seeing input fromthe , which is familiare with such large-scale development A private State Center LLC development team was selectedf in March 2006 to remake the state officwe complex off Martin Luther King As proposed, the developers woulf lease the land from the state, convert the complex into a $1.4 billionb mixed-use development, and then lease a substantialp portion of the project’s planned 2 million squarse feet of office space back to the statd for use by its various agencies. For the projecgt to move forward, the Boarf of Public Works must approvwe a master development agreement settint the terms for StatesCenter LLC.
Once that happens, the developers will then desighn the first phase of the project and come back to the statde with specific costs andlease terms. That proces s would continue through each ofthe development’s four expected to take between 10 and 12 yearx to complete. The first phase would focuxs onthe project’s office space. When fully the project is slated toinclude 1,200 residentia rental and for-sale 2 million square feet of offic space, 250,000 square feet of retail spacre and 7,000 parking spaces. Groundbreakin for the project’s first phase could beginn in June 2010.
Their efforts failed, but the legislature’s budget committeee passed a requirement the project be reviewed by state TreasurerNancy Kopp. The legislature asked Kopp to look specificallu at an accounting provisio of the project to determinre ifthe state’s leasing of officd space from the developers should be considerefd an operating lease or a capitalp lease. If it were deemed a capitakl lease, that would mean the state wouldf need to list it on its budget as an asset and a and those costs would be added tothe state’ overall debt affordability limitt — its ability to borrows money to finance other capital projects.
In a May 15 Those terms won’t be determined until after the mastetr development agreementis approved. But Kopp felt it shoul d be considered acapital lease, and those costs could cause the state to exceed its debt servicew limits by 2018.